European Commission levies record fines on truckmakers


Major European names caught up in official cartel backlash on pricing and emissions

European Commission levies record fines on truckmakers
The massive fines for catel activity have been made public.

 

The European Commission (EC) has slapped the region’s top European truckmakers with record fines of €2,926,499,000 (A$4.3 billion) for cartel activity over 14 years related to truck pricing and coordinating emissions costs.

The EC found that MAN, Volvo/Renault, Daimler, Iveco, and DAF broke European Union antitrust rules but the collusion was not aimed at avoiding or manipulating emission standards. 

The breakdown is: Daimler €1,008,766,000, DAF €752,679,000, Volvo/Renault €670,448,000, Iveco €494,606,000.

The companies are said to have already made financial provisions for the finding.

The decision "follows the sending of a Statement of Objections to the trucks producers in November 2014" the EC says in a statement.

"In the context of this investigation, proceedings were also opened with regard to Scania. Scania is not covered by this settlement decision and therefore the investigation will continue under the standard (non-settlement) cartel procedure for this company."

MAN was not fined as it revealed the existence of the cartel to the Commission.

Those that were acknowledged their involvement and agreed to settle the case.

"We have … put down a marker by imposing record fines for a serious infringement," competition commissioner Margrethe Vestager says.

"In all, there are over 30 million trucks on European roads, which account for around three quarters of inland transport of goods in Europe and play a vital role for the European economy.

"It is not acceptable that MAN, Volvo/Renault, Daimler, Iveco and DAF, which together account for around 9 out of every 10 medium and heavy trucks produced in Europe, were part of a cartel instead of competing with each other.

"For 14 years, they colluded on the pricing and on passing on the costs for meeting environmental standards to customers.

"This is also a clear message to companies that cartels are not accepted."

The deals related to medium- and heavy-duty vehicles.

The EC says its investigation revealed agreements relating to:

  • coordinating prices at "gross list" level for medium and heavy trucks in the European Economic Area (EEA). (The "gross list" price level relates to the factory price of trucks, as set by each manufacturer. Generally, these gross list prices are the basis for pricing in the trucks industry. The final price paid by buyers is then based on further adjustments, done at national and local level, to these gross list prices.)
  • the timing for the introduction of emission technologies for medium and heavy trucks to comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI)
  • the passing on to customers of the costs for the emissions technologies required to comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI).

The infringement covered the EEA from 1997 to 2011.

It says that in that time, "meetings were held at senior manager level, sometimes at the margins of trade fairs or other events. This was complemented by phone conversations."

From 2004, the cartel was organised through the truck producers' German subsidiaries, with participants generally exchanging information electronically.

Over the 14 years the discussions between the companies covered the same topics, namely the respective "gross list" price increases, timing for the introduction of new emissions technologies and the passing on to customers of the costs for the emissions technologies.

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